Infor OpEd

How to create an agile supply chain

Supply chains must adopt a ‘network approach’, connecting all partners to shared processes, data and metrics, managed within a single platform to succeed affirms Khaled AlShami, Senior Director, Solution Consulting, Middle East & Africa, Infor in the first part of a twopart contribution.

Competitive supply chains must enable a new level of coordinated performance that creates a highfidelity picture of in-process flows across your extended network. Building the continuous supply chain supports contextual deviations, conveys alerts and drives continuous planning via sense and respond capabilities.

Optimising multi-party business processes

Supply chains are complex networks where over 80% of the data and processes sit within partner systems. To see and act on the latest picture of your supply chain, your company needs that data from each of your partners, but the problem is most companies rely solely on an enterprise-centric approach to solve a multi-enterprise problem.

The only way to overcome those limitations is to adopt a ‘network approach’. Connecting all partners to shared processes, data and metrics managed within a single platform creates a single version of truth for all parties.

This allows supply chains to eliminate the data silos and inherent latency in order to reduce the root causes of friction, variability and costs in today’s supply chains, both internally and externally.

Managing product flows

Balancing customer service levels and supply chain costs is nothing new, but customer expectations are more demanding than even before due to how quickly products need to be in market to capture sales and quickly turnaround delivery. Your customers are under their own pressure to meet on-time and in-full (OTIF) delivery and that flows all the way back upstream.

These challenges highlight that today’s supply chain structures simply aren’t equipped to deal with the high demands if partners and systems aren’t providing ‘single truth’ visibility. With solutions that provide real-time visibility and machine learning to assist with predictive sensing of product availability issues, your company can make the needed adjustments to meet customer service agreements.

Advancing supply chin visibility maturity in the organization

How do we define supply chain visibility today? Leaving aside long-term forecasting and planning that depends on insight to meet demand, the operational aspects of the supply chain that we can materially impact with improved and multi-dimensional visibility involve orders, shipments, and inventory.

Obviously, supply chain visibility can’t be achieved from a single data source, or a single set of participants. Just as the old-fashioned supply ‘chain’ is more accurately described as a network today, so a networked solution to building multi-dimensional visibility to that ecosystem offers the best path to value.

A networked visibility approach means that business benefits can be realized across many cross-functional and crossdomain areas.

The value of visibility

Supply chain visibility frameworks need to recognize the milestone components that make international product flow successful as well as transparency of outbound truck shipments constrained by connectivity to many different carriers.

Collaboration with trading partners is the only way to gain the higher levels of visibility that can significantly improve global supply chain planning and fulfilment operations. To keep production running and customers happy, it is critical to know when expected product availability for fulfilment or consumption is in jeopardy.

Finance & Trade Flows

Volatility in supply chains makes it hard to profitably meet demand. Sourcing is complex, often involves hundreds of partners, and suppliers often don’t have access to adequate capital, causing instability in the supply base. The majority of inventory, cost, and risk is outside of a single enterprise’s control.

Too many siloed systems and not enough shared data make it impossible to reliably meet consumer demands. Companies, with only a few pieces of the puzzle, must scramble to track inventory and provide accurate ETAs.

Automation of supplier payment can help improve supplier relations, optimize working capital, and reduce fees and inefficiencies along the financial supply chain. To automate supplier invoice payments and standardize documentation, companies must transform themselves from silo-based, inward-facing corporate operators to interconnected, highly agile business network orchestrators.

End-to-end visibility & orchestration

Incorporating your supply chains’ ability to sense and respond, orchestrate finance and trade flows, and utilize advanced data centres and artificial intelligence is crucial for providing transparent visualization of supply chain dynamics.

In addition to these pillars, next generation control towers, or control centres, deliver pervasive end-toend visibility by capturing impact, interconnections, repercussions, and options. They synchronize participants to help dissolve a functionally siloed approach to fulfilment.

Once organizations adopt a networked solution that allows all parties to share and see real-time updates, the heightened sense and response capabilities allow them to further close the loop and develop the continuous supply chain.

PART TWO:

In Part Two, the author notes that as the manufacturing world continues to evolve to meet new challenges, there’s a step-change in innovation for the products and services that are delivered and supported.

Manufacturing: The importance of speaking your language

Many industry insiders are expressing the need for a focus on driving sustainable (and profitable) business growth. Deloitte suggests digital investment and supply chain resilience as the key pillars.

Partnerships are also increasingly important to achieving sustainable business growth, whether that’s upstream or downstream within your supply chain or enabling partners such as application and technology providers.

In all of those partnering scenarios, it’s important to have a common understanding of your desired outcomes, so you can ensure you’re all speaking the same language, which helps shorten the time to value.

Manufacturing is shifting towards industry-specific applications and these applications are now nearly always delivered in the cloud to maximize adoption, flexibility, availability, and security, as well as reducing throughlife cost of ownership. In fact, Gartner forecasts end-user public cloud spending to grow by 18% through 2021.

Horizontal versus industryspecific applications

If you consider yourself a well contained, low risk, low complexity organization with customers who will continue to remain happy with the status quo and you see no real threat of disruption, a horizontal, onesize fits all approach to ERP may still suffice.

However, most companies need to simplify the management of their complex business and are looking to differentiate through the application of technology.

Horizontal applications can manage a particular business function: typically finance and procurement but with everything else just bolted-on. Organizations that I speak with are coming to the realization that industryspecific capabilities and new technology are needed.

Industry-specific cloud ERP

The old ways no longer fit their purposes. Industry-specific cloud ERP offers capabilities that match the way that you do (or should do) business. You can do things right and operate in real time to unlock your business’s potential. It’s also faster to implement, so you’ll see success more rapidly.

An industry-centric, single view or digital twin of your business helps you identify variations to expected operational performance early, so they can be analyzed and managed long before your finance teams would typically become aware of them. The finance role can then transition to focus on strategic operational and financial improvement, fostering a continuous improvement mentality.

As the author Jim Collins talks about when referring to the ‘flywheel effect’, good-to-great transformations are unlikely to occur in a single step. A clearly articulated and communicated strategy that results in measurable, incremental improvements is key to successful, longterm transformation.

Industry enabled

Unsurprisingly, when it comes to triggering organizational change, the business drivers are often a complex mix of customer expectations and demands for a better experience, a focus on operational effectiveness, and the need to meet stricter industry regulations and operating conditions.

That’s why it’s important for your applications software technology vendor to speak the same language as your business. As an example, optimizing the order to delivery process in an engineer-to-order or configureto-order environment demands a single view of the product from concept through quote to build, delivery, and then on through life support. Anything less adds risk to the whole process.

Why now?

As the old saying goes, “The best time to plant a tree was 20 years ago. The second-best time is now.” Organizations that have traditionally been slow to move still have time to catch up. The challenge is often creating the internal momentum—the first push on the flywheel. In true partnerships, when everyone speaks the same language, multiple stakeholders come together to create a more powerful outcome.

Don’t wait too long. Early adopters are now more agile, flexible, and efficient—and they could already be making inroads into your share of the market. The right partner, with the right industry experience and knowledge, will understand the value you can gain by helping you solve your challenges. They can assist your organization in defining a roadmap to success.

Siloed initiatives emerge as key challenges to Middle East Digital Transformation projects

62% of manufacturers in the Middle East, Turkey, and Africa worry about siloed technology environments—IDC Study

While an impressive 76% of manufacturers in the Middle East, Turkey, and Africa (META) region are currently engaged in, or about to start, a formal digital transformation (DX) programme, a significant proportion risk limiting their efforts by failing to connect key elements including DX initiatives, data, and technology environments, according to a recent info brief by market intelligence and advisory company IDC.

The info brief, which was sponsored by Infor, refers to ‘Islands of Innovation’ as a key challenge, with siloed DX initiatives, siloed data, and siloed technology environments highlighted as three particular challenges for manufacturers to be aware of and fix.

In total, 44% of organizations said their DX initiatives are not integrated, undermining the perception of DX as being everyone’s responsibility, and that their digital roadmap focuses on the short term and fails to factor in the long-term transformation of their industry.

Siloed data

51% of organizations pointed to siloed data as a challenge, driven by limited understanding of existing data assets, and a lack of enterprise-wide data management. This is often exacerbated by un-integrated decision-making based on small subsets of data using rudimentary analytic models.

Meanwhile, 62% of organizations worry about siloed technology environments. Indeed, in many organizations, multiple digital technology environments exist separately from core IT. Some organizations have consolidated this into two separate technology environments – core IT and digital innovation – connected via APIs, the info brief states.

The good news is that organizations can overcome these challenges and improve their chances of successful DX by adopting a cloud-based integrated digital platform to connect the islands and break the silos.

Extensive Restructure

To achieve this, manufacturers need to extensively restructure, placing data at the centre of their processes to increase speed, agility, efficiency, and innovation, according to IDC. Enterprise applications need to be powered by an intelligent core that analyzes different types of data from a myriad of sources.

“It’s vital for manufacturers to achieve successful digital transformation due to rapidly changing customer profiles, business models, and the proliferation and growing use of apps and digital devices,” noted Jebin George, IDC Programme Manager.

“By adopting an integrated digital platform, manufacturers can increase their chances of successful digital transformation, which can help them automate, add value to their business, and position them to prosper as we move into the Fourth Industrial Revolution,” he added.

The Millennial / Gen Z Generation

This message is especially pertinent in the Middle East, where 75% of the population is Millennial or Gen Z, providing a growing base of digital consumers. Moreover, national industrial development plans across the region are focused on digitalization of the manufacturing sector, and a high volume of ‘digital-native’ enterprises are creating business models that could present new opportunities to manufacturers.

“Manufacturers in the region face numerous challenges, but with the right approach, adversity can always be turned to opportunity. It is important for manufacturers to take a step back and ensure that they develop the right DX strategy with an integrated platform at the core,” observed Khaled AlShami, Infor Senior Director, Solution Consulting, Middle East and Africa.

“We’re excited to help manufacturers transform successfully and take manufacturing into the digital era,” he concluded.